REYKJAVIK, Iceland - April 9, 2011 - Icelandic voters appeared Sunday to have rejected a government-approved deal to repay Britain and the Netherlands $5 billion for their citizens' deposits in the failed online bank Icesave.
Partial results of a national referendum suggested the "no" side had gained more than half the votes - a reflection of enduring anger over the economic havoc wrought by Iceland's risk-taking bankers.
Full results were not due until later Sunday. With partial results in from all six of Iceland's constituencies, the no side had almost 57% of the votes and the yes camp just over 43%.
"This is of course a disappointing result," said Prime Minister Johanna Sigurdardottir.
Icelanders overwhelmingly rejected a previous deal in a referendum last year. The government hoped a "yes" vote on an improved offer passed by Parliament would finally resolve a dispute that has caused friction among the three countries and complicated Iceland's recovery from its economic collapse in 2008.
The dispute has grown acrimonious, with Britain and The Netherlands threatening to block Iceland's bid to join the European Union unless it is resolved.
"Taxpayers should not be responsible for paying the debts of a private institution," said Sigriur Andersen, a spokeswoman for the Advice group, which opposes the agreement. "I think that sends the wrong message to the market, and sets a wrong precedent."
Banks that make stupid loans should suffer for them, not taxpayers. So far, Iceland is the only country that has taken this common sense stance.
